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Subscribe to In the Loop<\/a><\/p>\n Who to Know: Larry Ellison<\/p>\n When you think about the top echelon of the world\u2019s tech elites, Larry Ellison probably doesn\u2019t spring to mind. But on Wednesday, the 81-year-old chairman of Oracle briefly became the richest person in the world with a net worth of almost $400 billion, overtaking Elon Musk.<\/p>\n Ellison\u2019s $100-billion jump was the biggest<\/a> single-day gain ever, and the result of a promising Oracle growth forecast in which they advertised hundreds of billions of dollars in inbound revenue from AI companies using Oracle\u2019s cloud computing capabilities. Ellison\u2019s stratospheric rise can be attributed both to the dynamics of the current AI boom, and his own approach to corporate financing.<\/p>\n Low in the stack \u2014\u00a0Oracle isn\u2019t thriving in every metric. The company missed on analysts\u2019 revenue expectations, and has a projected<\/a> three more years of negative cash flow. One industry publication reported<\/a> that the company just underwent significant layoffs.<\/p>\n But at the moment, we\u2019re at the stage of an AI hype cycle in which the main spenders on AI aren\u2019t end users, but rather the AI companies building the products. This means that the biggest beneficiaries are the companies lower in the stack, including chipmakers like NVIDIA\u2014and Oracle, which owns and operates data centers which provide cloud infrastructure to other AI companies.<\/p>\n Oracle\u2019s ability to solve the vast logistical challenges inherent in building super clusters releases AI companies from operations burdens, making them an appealing partner. And they often charge less than their competitors. As a result, they\u2019ve signed contracts worth hundreds of billions of dollars with companies like OpenAI and xAI. When Oracle advertised these deals and all of this future revenue on Wednesday morning, the company\u2019s shares jumped around 38%.<\/p>\n It\u2019s who you know \u2014 It can\u2019t hurt that Ellison has strong relationships with the world\u2019s other most powerful men. Ellison hosted a fundraiser for Trump in 2020, was spotted at Mar-a-Lago during Trump\u2019s fundraising efforts last year, and became a primary partner on Trump\u2019s Stargate project in January, which aims to build $500 billion in AI infrastructure in the U.S. Ellison has also long been close with Musk: In 2022, he agreed<\/a> in a text message to Musk to put a billion dollars, or \u201cwhatever you recommend,\u201d toward his efforts to buy Twitter.<\/p>\n Buyback frenzy \u2014 But plenty of companies are profiting like crazy off the AI boom\u2014so why has Ellison profited so uniquely enormously? The answer lies with how much Oracle\u2019s stock he owns. Ellison has a 41% stake in Oracle, nearly double what he owned fifteen years ago. That\u2019s because in the last decade, he and Oracle have embarked on one of the biggest stock buyback programs in corporate history, sometimes taking out loans to finance the share repurchases.<\/p>\n Investors like stock buybacks because it makes their own shares more valuable. But there are many critics of the strategy, who argue that it prioritizes short-term gain over long-term investment in infrastructure or R&D. Chuck Schumer called stock buybacks \u201cone of the most self-serving things that corporate America does.\u201d<\/p>\n Because Ellison owns so much Oracle stock, his net worth swings up and down along with the share price. That\u2019s why his worth catapulted past Elon this week\u2014only to return back to around $376 billion a day later.<\/p>\n What to Know: Regulatory sandbox proposal<\/p>\n Ted Cruz has long been one of the AI industry\u2019s biggest allies in Congress, arguing that the industry needs to be left alone in order to spur growth and innovation. On Wednesday, he introduced a bill that would protect AI companies from regulation as they experiment with new technologies.<\/p>\n The bill would create a \u201csandbox\u201d in which companies could apply to waive certain regulations for two-year periods, for up to ten years. Cruz received support from OSTP director Michael Kratsios, who showed up to Cruz\u2019s hearing on Wednesday and said that anti-innovation regulations were \u201ca huge problem for our industry.”<\/p>\n Cruz\u2019s bill faces a long road to get passed. Plenty of Republican senators, including Marsha Blackburn and Josh Hawley, are keen to pass regulation that mitigates AI harms. Meanwhile, voices on the left responded with revulsion. The consumer rights advocacy group Public Citizen wrote<\/a> that the proposal \u201clets companies skirt accountability, and treats Americans as test subjects.\u201d<\/p>\n AI in Action<\/p>\n Several hours after the right-wing commentator Charlie Kirk was assassinated in Utah, President Trump posted a video on social media condemning the tragedy from the White House. But was it actually him? Within minutes, claims that the video was AI-generated spread online, with amateur sleuths pointing to Trump\u2019s finger momentarily disappearing and the video\u2019s saturated colors.<\/p>\n However, experts have cast skepticism on this theory. \u201cWe have reviewed this video and find no evidence that the audio or video is AI-generated,\u201d Hany Farid, co-founder of the cybersecurity firm GetReal Security, wrote<\/a> on LinkedIn. He said that the finger distortion may have come from \u201clocalized video manipulation.\u201d<\/p>\n Regardless, the response to the video showed how difficult it now is to believe anything you see online, thanks to advancements in AI deepfakes. Videos that are fake are believed to be real; videos that are real can easily be derided as fake. (Trump himself dismissed<\/a> a video of a bag being thrown out of the White House as \u201cprobably AI-generated.\u201d)<\/p>\n Some companies, like Google, have implemented watermarking systems to differentiate between real and fake videos. But so far, it seems that viral videos spread faster than they can be verified. In this muddle, it seems likely that people will simply stick to their preconceived notions about truth and fiction, thus making the internet ever more fractured and contentious.<\/p>\n What to Read<\/p>\n